Labour's exit from government in Israel will further reduce the already remote prospects for renewing peace talks, writes Peter Hirschberg in Jerusalem
When Labour Party chairman Benjamin Ben-Eliezer severed his partnership with Prime Minister and Likud leader Ariel Sharon on Wednesday, by pulling his party out of the 20-month-old national unity government in Israel, he did so for the wrong reason - political expediency - but over the right issue - the settlements in the West Bank and Gaza Strip.
Trailing badly in opinion polls ahead of a Labour leadership primary scheduled for November 19th, Mr Ben-Eliezer manufactured a crisis over his demand that $145 million in funding to Jewish settlements be re-allocated to the poor if he was to back the 2003 state budget. In recent weeks, the defence minister has also ordered the army to dismantle illegal settlement outposts in the West Bank.
It is not as if Mr Ben-Eliezer suddenly discovered the outposts, which have been popping up across the West Bank for the last four years. Nor did it suddenly dawn on him that the settlements were receiving inordinate funding and that people in working class towns are becoming increasingly desperate as Israel's economy founders.
Rather, it is Mr Ben-Eliezer's calculation that by bolting the government over an issue like settlements, he will be able to cut into the support commanded by his two opponents in the party leadership run-off - Haifa Mayor Amram Mitzna and long-time Labour politician Haim Ramon. Unlike Mr Ben-Eliezer, both of his rivals are at the dovish end of the party, which strongly opposes the settlements.
His political stunt will most likely fail. But his focus on the settlements, whose builders hope to frustrate any future peace deal with the Palestinians, is vital. The settlements have become an intolerable economic, diplomatic and security burden on the country, but the debate over their future has been muted ever since Labour joined Mr Sharon in government.
DESPITE two years of Palestinian violence - or, maybe, because of it - Israelis appear willing to abandon the settlement project. A recent survey indicated that close to four out of every five Israelis are willing to accept the dismantling of most of the settlements as part of a comprehensive peace agreement with the Palestinians.
The immediate impact of Labour's exit from the government, however, will be to further reduce the already remote prospects for renewing peace talks. Mr Sharon, who now has 55 members in his Labour-less coalition, out of the 120-seat parliament, is already making overtures to a seven-member far-right party in a bid to cobble together a narrow government majority.
Mr Sharon, who has strongly backed many of the settlements, has never displayed any enthusiasm for an agreement with the Palestinians. During his 20 months in office he has been able to sidestep several diplomatic initiatives, thanks in part to Palestinian Authority Chairman Yasser Arafat's obduracy. But he will rapidly discover that a political alliance with the far right, which wants him to ratchet up Israel's military response to the Palestinians even further, will lock him in a diplomatic straitjacket.
The far-right parties have already called on him to "legalise" the outposts Mr Ben-Eliezer started dismantling. They have also demanded he reject the recently floated US "road map" for peace in the Middle East - a move that would propel Mr Sharon into a confrontation with the Americans, Israel's main ally.
Even a seemingly innocuous issue, like the transfer of frozen tax revenues to the Palestinians - a request the US recently made of Israel - could spark a coalition fallout in a government at the mercy of the far-right.
Confronted with his new political reality, Mr Sharon might swing sharply to the right. But, bereft of the diplomatic flak-jacket afforded him by the moderate Labour Party and by Foreign Minister Shimon Peres's international stature, it is more likely he will conclude his only real option is to go to the polls. The opinion surveys are a compelling reason for him to do just that: all predict an electoral windfall for the Likud.
With Labour still trying to recover from its electoral battering in February 2001, when the public evicted its leaders from office after the failure of the Camp David peace talks and the eruption of the Palestinian uprising, it is highly likely that the leader of the Likud will also be the prime minister after the next election.
BUT there is no guarantee it will be Mr Sharon. He must first fend off a formidable challenge from former prime minister Benjamin Netanyahu in the Likud's leadership primary. Recent polls show Mr Netanyahu narrowly ahead, after months in which Mr Sharon had held a secure lead.
In the corridors of Israel's parliament, the Knesset, the talk is of elections by March or April next year. They could be earlier if Mr Sharon resigns - a move that would spark a ballot within 90 days. Traditionally, though, election dates have been the product of an agreement between the two large parties, Labour and Likud.
Still, the seemingly inevitable lurch towards elections could be held up by a US strike on Iraq, especially if Israel again becomes the target of Saddam Hussein's missiles. This could precipitate an emergency government that would include Labour.
But even such a political constellation would likely be shortlived, with elections still being brought forward from October 2003 - the date by which they must be held, according to Israeli electoral law.
As the political crisis over the budget intensified, Mr Ben-Eliezer increasingly talked about the need for a new "diplomatic horizon". It is not clear whether the Israeli public will dismiss this talk as cheap opportunism, or whether they are even ready to countenance a return to talks before Mr Arafat is replaced.
After having spent 20 months as an obedient servant of Mr Sharon, it is also questionable whether Labour can present an effective alternative to the Likud. But even if Labour doesn't form the next government, for those who believe the time has come for Israel to press a new diplomatic initiative - whether a bid to re-engage the Palestinians in talks or a unilateral withdrawal from the territories - it is vital they do.